Pound Could Fall if Market Forced to Scale Back Rate Rise Bets

Sterling could suffer further declines in the near-term after last week's period of weakness as the market may be forced to scale back its expectations for U.K. interest rate rises, Commerzbank says. The Bank of England is likely to reduce monetary policy support "very cautiously" given the supply shortages affecting the economy, which may not be solved any time soon given the U.K. has to contend with Brexit-induced labor shortages on top of global supply chain issues, Commerzbank currency analyst Esther Reichelt says. "In view of the already very advanced rate expectations the downside risks for sterling therefore dominate short-term." GBP/USD trades flat at 1.3555 and EUR/GBP rises 0.1% to 0.8569. 


 
Companies News:

Future PLC Sees FY 2021 Adjusted Operating Profit at Top End of Expectations, CFO to Step Down

U.K. media group Future PLC said Monday that it expects adjusted operating profit for fiscal 2021 to be at the top end of expectations, and that Chief Financial Officer Rachel Addison will step down with effect on Oct. 31.

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Cerillion Sees FY 2021 Revenue, Profit Beating Views

Cerillion PLC said Monday its financial performance in fiscal year 2021 was better than the market had anticipated.

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Greencoat Renewables Launches New Share Issue Program

Greencoat Renewables PLC said Monday that it plans to launch a new 12-month share issue program for up to 400 million new shares and that it will use any money raised toward its growing pipeline of investment opportunities.

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Castings Says Revenue, Profit Took a Hit in 2Q

Castings PLC said Monday that revenue and profit were negatively affected during the second quarter, and that the time lag in the associated sales price increase of raw-material prices has continued to put pressure on margins.

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Croma Security Says FY 2021 Ebitda Will Be Above Guidance

Croma Security Solutions Group PLC said Monday that it expects to report earnings for the year ended June 30 ahead of previous guidance.

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Quadrise Fuels Pretax Loss Narrowed in FY 2021; Chairman to Step Down

Quadrise Fuels International PLC on Monday reported a narrowed pretax loss for the fiscal year 2021 and said Chairman Mike Kirk will leave the company following the annual general meeting in November.

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AIQ Subsidiary Awarded $552,000 Australian Contract

AIQ Ltd. said on Monday that its Hong Kong-based subsidiary Alcodes International has been awarded a $552,000 contract by an Australia-based customer.

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Riverstone Energy Increases Buyback Program to GBP40 Mln

Riverstone Energy Ltd. said Monday that it has increased it buyback program to 40 million pounds ($54.2 million).

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Marlowe Acquires VinciWorks, Hydro-X

Marlowe PLC said Monday that it is acquiring Vinci Legal Ltd. and Hydro-X Group Ltd. for a combined consideration of up to 84 million pounds ($113.8 million).

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VP Performing in Line With Board's Expectations; Revenue at 96% of Pre-Pandemic Levels

VP PLC said Monday that it was performing in line with the board's expectations, and that revenue was running at 96% of pre-Covid-19 levels.

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Caledonia Mining Raises Quarterly Dividend by 8%

Caledonia Mining Corp. said Monday that it is increasing its quarterly dividend by 8%.

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BrandShield Systems Agrees on $2.5 Million Loan With Israeli Bank

BrandShield Systems PLC said Monday that it has agreed on an eight million Israeli shekel ($2.5 million) loan with Leumi Bank, and that it will use the funds to support the company's growth.

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Great Southern Copper to Float on London Stock Exchange

Great Southern Copper PLC said Monday that it is planning to float on the London Stock Exchange.

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Aura Energy Says Trading on ASX Has Been Halted Temporarily, Shares in London Rise

Shares in Aura Energy Ltd. rose Monday after it said the Australian Securities Exchange approved a halt in the trading of its shares on the ASX at the close of business on Oct. 4, but that trading on the AIM continues as usual.

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Zoltav Resources Shares Fall on New Credit Facilities, Potential Delisting

Zoltav Resources Inc. shares fell Monday after it said it has entered two non-revolving credit facilities with Sberbank Rossia, which it said will require it to materially reduce overheads and potentially drop its AIM listing.

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JKX Oil & Gas to Sell Last Noncore Asset to Focus on Ukraine

JKX Oil & Gas PLC said Monday that it has decided to sell its sole remaining noncore asset, its wholly owned Russian operating subsidiary Yuzhgasenergie LLC, in order to focus on opportunities in Ukraine. 


 
Market Talk:

BT's Bonds Look Unattractive Given Possible Sky-Virgin Broadband Deal

0916 GMT - Media reports that Sky is closing in on a deal with Virgin Media O2 to become an investor in the telecoms operator's full-fibre broadband rollout in the U.K. is a medium-term negative for BT's bonds, says ING. BT risks losing Sky wholesale customers and the potential deal would increase competition, it says. The reports are "likely to drive BT [bond] spreads," says ING's Jan Frederik Slijkerman. BT bonds spread pickup compared with Vodafone euro notes is small and BT notes aren't attractive, he says, adding that they should reflect risks from increasing competition as well as from possible shareholder action, such as an increase in leverage as well as the risk of a partial asset sale, he adds.

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New Covid-19 Treatment Isn't Seen as Significant Competition for Vaccine Makers

0900 GMT - Interim results from a study on an antiviral treatment for Covid-19 by Merck and Ridgeback Biotherapeutics hit the shares of vaccine makers, including BioNTech, but vaccination is likely to remain the primary means of fighting the pandemic, Bryan Garnier says. "We believe that the potential molnupiravir approval could add extra fuel into vaccination hesitancy and slow down vaccine booster implementation to some degree, but overall we expect the governments to continue focusing on vaccination campaigns as the most effective measure against the pandemic," the investment bank says. This means that Merck's antiviral treatment would provide an additional tool rather than represent significant competition for vaccine makers, says Bryan Garnier.

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More UK Companies Look Set to Face Bids After Morrisons

0834 GMT - More U.K. companies could face takeover bids by overseas predators after a consortium led by U.S. buyout firm Clayton, Dubilier & Rice won the bidding war for Wm Morrison Supermarkets, Hargreaves Lansdown says. The CD&R-led group outbid SoftBank Group Corp.'s Fortress Investment Group and partners with a near-$9.4 billion offer in a one-day auction held Saturday. "While this takeover story might be wrapping up soon, that doesn't mean we won't see others," HL analyst Sophie Lund-Yates says. "Fortress is clearly interested in what the U.K. has to offer and a boom in private-equity activity in London this year means it won't be the only one." While shares in Morrisons drop 4%, shares in Sainsbury, Tesco and Marks and Spencer all rise.

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UK Fuel Panic Buying Is a Warning Sign for More Serious Outcomes Ahead

0831 GMT - The current fuel crisis in the U.K. echoes the rush to stockpile toilet paper during the first wave of the pandemic and panic buying could become a feature of the U.K. economy, Berenberg's senior economist Kallum Pickering says. "The panic and hysteria in U.K. partly reflects a growing lack of confidence by the public in the government's ability to manage the economy and fix problems when they arise," he says. "A noisy and economically damaging Brexit followed by a worse than average response to the pandemic has left the U.K. public and financial markets with more than a faint impression that the U.K. is performing well below its potential," Pickering says.

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UK 10Y Gilts Underperform Peers Amid Inflation Fears

0829 GMT - U.K. sovereign bonds underperformed U.S. and European peers last week as investors priced in rising global inflation expectations, Deutsche Bank says. "The major driver of the move in global yields was rising inflation expectations," analysts at the bank say, noting that U.S. 10-year breakevens jumped 4.5 basis points last week, the 10-year bund breakevens climbed 9.3 bps to reach their highest level since 2013, while 10-year gilt breakevens rose 3.5 bps to their highest level since 2008. The breakeven rate, or the difference between the yield on a nominal bond and that on an inflation-linked bond of similar maturity, reflects the average level of inflation that investors expect over the life of the bonds. The 10-year gilt yield trades last at 1.015%, according to Tradeweb.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

10-04-21 0606ET